ASIC regulatory update

What are the changes?

The changes released by ASIC include:

• Leverage ratio limits
  • 30:1 for CFDs referencing an exchange rate for a major currency pair
  • 20:1 for CFDs referencing an exchange rate for a minor currency pair, gold or a major stock market index
  • 10:1  for CFDs referencing a commodity (other than gold) or a minor stock market index
  • 2:1 for CFDs referencing crypto-assets
  • 5:1 for CFDs referencing shares or other assets

• Margin close-out percentages - standardise CFD issuers’ margin close-out arrangements that act as a circuit breaker to close-out one or more a retail client’s CFD positions before all or most of the client’s investment is lost

• Negative balance protection - protect against negative account balances by limiting a retail client’s CFD losses to the funds in their CFD trading account

• Promotional offers - prohibit giving or offering certain inducements to retail clients (for example, offering trading credits and rebates or ‘free’ gifts like iPads).

• Binaries and Countdown products - Countdowns were removed from the CMC Markets Trading Platform on the 30 April 2021